Investing in yourself: A guide for young professionalsDate posted: 6/12/16 09:00:00 AM
For those graduating from college or graduate school, it can be daunting to enter the professional sector. From investing in a new wardrobe for work to making sure you set aside enough money for emergencies, there are many aspects of your finances that you'll want to consider upon entering the professional working world.
Establish your budget
What you wind up investing in and saving for largely depends on your current financial situation. Whether you are a recent grad looking for a position or someone who has been extended an offer, your current employment situation impacts how much money you have access to.
Sit down and determine how much you can spend to launch your career and list what items you must invest in, like clothes, supplies or even transportation. If you are working with an especially limited budget, but are interviewing at various businesses, you will need to have at least one suitable outfit for interviews.
If you already have a job, make sure you know how much money to expect as income each month after taxes and insurance are taken out. This will be of great assistance when submitting applications for everything from credit cards to an apartment.
Build a professional wardrobe
While in school, your clothes are likely different from those you will need to wear on a daily basis at a new job. Unfortunately, professional clothes can be pricey, so it's critical to build your wardrobe in a way that suits your needs without breaking your budget.
According to Money Under 30, building your wardrobe slowly and investing in key pieces first is the best way to get started.
"Quality pieces, taken care of properly, will generally last much longer than cheap pieces," said Kat Griffin, who runs a fashion and career blog, reported Money Under 30. "It makes sense to invest in things you know you'll wear."
Some great ways to keep costs low is by finding deals. Discount stores, like T.J. Maxx or premium outlet stores, are great places to find high-quality clothing without spending too much money. In addition, keep an eye out for sales online. However, make sure you fully understand the return policy. If something doesn't fit appropriately, you want to ensure you can return or replace it.
If you want to have access to a little more money to fund your new wardrobe, consider selling old clothes in order to offset some of the costs associated with buying new pieces.
"That way you help the next generation, and it provides you with some cash for the clothes you need," noted Griffin. "You may be able to sell your clothes and perhaps even find some other outfits that may work for you now, but cheaper."
Invest in your career
One expense you will need to incorporate into your budget is career-related investments, noted U.S. News & World Report. Whether you spend more on workshops, conferences or furthering your education, it's typically worthwhile to spend money on increasing your future earning power.
Along with spending money on future development, you'll also want to pay off existing debt. Pay off student loans and credit cards as fast as you can. You may want to prioritize loans with higher interest rates as they can cost you more over time.
Tuck away some money for emergencies
When you enter the professional arena, it's no secret that life can throw curve balls. Be prepared for anything by having a savings account designated for emergency situations. Whether unexpected medical expenses arise or you lose a job, having a little extra money to make ends meet will be critical.
Make a savings goal equal to three months of your living expenses. Deposit a certain amount of money into an account every pay check to slowly build your safety net. You will be grateful you made a habit of saving when you find yourself in a tight spot.
Make your money work for you
Invest money as soon as possible. It's best not to wait — especially when it comes to starting a retirement account. The earlier you get started on a 401(k) account or individual retirement account, the better. Investing now means there will be more time for your money to build interest.
If you have been offered a position, find out more information about the 401(k) offered. Ask if your potential employer matches contributions as this can help you build funds at a faster rate.
Entering the working world means managing your finances in a way that is best for you and your fiscal future. Consider hiring a financial advisor to assist you with the new decisions you will need to start making as a professional for an easier transition.
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